UPDATE 1-Huawei to double staff in European expansion

HELSINKI, Dec 10 (Reuters) - Chinese telecoms equipment maker Huawei Technologies plans a hiring spree in Europe, seeking growth outside the United States where its prospects have been clouded by spying concerns.

Huawei said on Monday it planned to double its workforce in Europe and would set up a research centre to develop new smartphones in Finland, where former global leader Nokia Oyj is shedding thousands of workers.

"Europe has proven to be quite an open business environment for Huawei," company spokesman Roland Sladek said.

The expansion plans for Europe come two months since a U.S. congressional report alleged Huawei's equipment could be used for Chinese espionage. The company has also been barred in Australia from tendering in a $38 billion national high-speed broadband network project due to unspecified security concerns.

The group aims to employ over 14,000 in Europe within three to five years, doubling the current workforce of around 7,000, and also plans to spend 70 million euros ($91 million) over five years on the new R&D centre in Finland.

It will be Huawei's 11th centre in the region and will have a planned staff of around 100.

Underscoring its European expansion, Huawei also said it won a services deal with 3 UK, owned by Hutchison Whampoa, a contract previously held by rival Ericsson.

With Nokia cutting 3,700 jobs in the country, the Chinese group may face little difficulty finding recruits for its research centre.

While Nokia has been losing market share to both high-end smartphone makers and cheaper handset rivals, Huawei has been expanding its mobile phones business with new handsets using Google Inc's Android software.

Mobile devices last year accounted for 22 percent of Huawei's business, which mostly focuses on routers and other telecoms equipment.

Huawei has said it wants to launch new smartphones including Windows Phone 8 devices, which would add to the competitive pressure on Nokia.

Huawei declined to give an estimated launch date for a new Windows Phone 8 device, but said its plans were "short term".